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Welsh Government announces mortgage scheme to help first-time buyers

A scheme to help people take their first step onto, or move up, the property ladder is being introduced in Wales in Spring.

The three-and-a-half-year scheme will be available to all buyers facing housing pressures.

£27m from the Welsh Government will support the purchase of up to 3,000 new-build homes up to the value of £250,000.

Buyers will not be able to claim the funding directly. Instead, house builders and the Welsh Government will act as guarantor, while buyers must contribute a 5% deposit.

The Welsh Government says the mortgage guarantee scheme could allow an investment in housing of up to £500m within a three-year period.

How it works:

Buyers put down a 5% deposit

Welsh Government and house builders act as guarantors so that buyers can secure higher mortgages

If the homeowner defaults on the loan, any losses would first be covered by equity in the property

This would be followed by the house builder's indemnity fund, equal to 3.5% of the loan value

The Welsh Government would be third in line to make good any losses

The housing market in many parts of Wales has seen little or no growth for several years, but the Welsh Government says the scheme is delivering on its commitment in May to make housing a key infrastructure priority.

Housing Minister Huw Lewis says the scheme was 'excellent news' for potential house buyers, adding that it will boost house building, create jobs and stimulate growth.